Issues, Challenges, Debates Peter G. Klein University of Missouri - PowerPoint PPT Presentation

Entrepreneurship Theory: Issues, Challenges, Debates Peter G. Klein University of Missouri ENT Doctoral Consortium San Antonio, August 2011 1 | Entrepreneurship Theory Peter G. Klein | University of Missouri | AoM 2011

Theorizing about entrepreneurship ► General issues and problems ► Some important theoretical contributions ► Relationship between theory and applied work ► Caveats 2 | Entrepreneurship Theory Peter G. Klein | University of Missouri | AoM 2011

Issue #1: What exactly is entrepreneurship? ► A phenomenon  Self employment  Startups  Small-business management  New-product introduction  Analytical tools: “standard” economics, sociology, psychology, history ► A way of acting  Creativity, imagination, initiative  Innovativeness  Alertness to profit opportunities  Judgment under uncertainty  Analytical tools: “alternative” economics, sociology, psychology, history ► My secret desire: drop the e-word 3 | Entrepreneurship Theory Peter G. Klein | University of Missouri | AoM 2011

Issue #2: “Theory” – varies by academic discipline ► Neoclassical economics  Labor-economics literature on occupational choice  Economics of innovation and technology  Economics of networks ► Heterodox economics Behavioral economics models of biases and  heuristics  Austrian perspectives on discovery and judgment ► Sociology ► Multidisciplinary approaches  Social network theory  Entrepreneurial orientation  Identity  Effectuation ► Psychology  Strategic entrepreneurship Entrepreneurial cognition  literature ► History, rhetoric Positioning issues?  ► Others? 4 | Entrepreneurship Theory Peter G. Klein | University of Missouri | AoM 2011

Issue #3: Metholodogy ► The unit of analysis  Individuals?  Teams?  Firms?  Industries, economies, societies?  Opportunities?  Investments? Figure 1 : A General Model of Social Science Explanation  Behaviors? ” Social 4 Social   facts ” (e.g., outcomes ► Methodological institutions) ” macro ” individualism 1 3 ► Causation ► Theory and practice ” micro ”   Conditions Individual of individual action 2 action 5 | Entrepreneurship Theory Peter G. Klein | University of Missouri | AoM 2011

Some important theoretical contributions ► Schumpeter (1911): introducing exogenous change to Walrasian equilibrium ► Knight (1921): decomposing interest, wages, and profit; risk versus uncertainty ► Kirzner (1973): using alertness to explain market equilibration (Note on instrumentalism) ► Kihlstrom and Laffont (1979): self- employment and risk aversion ► Baumol (1990): productive, unproductive, and destructive entrepreneurship ► Lumpkin and Dess (1996): entrepreneurial orientation ► Garud and Karnoe (2003): bricolage versus breakthrough ► Lazear (2004, 2005): balanced skills ► Alvarez and Barney (2007): discovery versus creation 6 | Entrepreneurship Theory Peter G. Klein | University of Missouri | AoM 2011

Soapbox comments ► There is no “entrepreneurship theory.” ► Many theory papers try to do too much (the kitchen-sink model). ► We have few established criteria for choosing among rival theories. ► Good research can be phenomenon driven, not theory driven. 7 | Entrepreneurship Theory Peter G. Klein | University of Missouri | AoM 2011